Ukrainian companies in Germany

Will the Ukrainian company continue to exist if it relocates?

Yes, a Ukrainian company, such as a TOV, continues to exist even if its managing directors and shareholders have left the country, provided it is registered in the Unified State Register. Ukrainian law permits remote management: decisions, representation and day-to-day operations can be organised remotely. The company does not lose its legal capacity simply because its staff are working abroad.

This continuity is the starting point for any relocation. However, this also means that Ukrainian obligations continue to apply. Accounting, tax returns and filings must still be complied with, and the details of representation must be correct in the register. Anyone setting up a business in Germany is therefore not simply moving a company across the border, but operating two interconnected structures within two legal systems. A clear separation of responsibilities, contracts and cash flows between the two is crucial to the resilience of the whole operation.

Which foreign exchange regulations issued by the National Bank must be observed?

Foreign exchange regulations are the critical issue. To protect its currency reserves, the National Bank of Ukraine (NBU) restricted cross-border capital movements at the start of the full-scale invasion. This affects, amongst other things, payments abroad, holding funds in foreign accounts and, above all, new investments abroad, which are largely restricted whilst martial law is in force.

For a company wishing to relocate its production, this means that setting up a German entity cannot simply be financed through capital transfers from Ukraine. Permissible financing methods must be assessed on a case-by-case basis, such as through income generated abroad or via strictly defined, authorised transactions. The restrictions vary depending on the situation and are being gradually adjusted. Before any major transfer of money or assets abroad, the current NBU regulations must therefore be checked, as a breach could have serious consequences.

How can a business and its assets be relocated?

As well as money, this often involves physical and intangible assets such as machinery, stock, brands, software and customer relationships. The export of equipment and goods from Ukraine is subject to customs and foreign trade legislation. Under martial law, there are additional restrictions, as well as export bans or licensing requirements for certain goods. It is therefore necessary to check in advance whether the items to be relocated can be exported.

Intangible assets are generally easier to transfer than physical ones. Trade marks and other intellectual property rights, as well as software rights, can be licensed or transferred. This requires contracts that comply with Ukrainian law and foreign exchange regulations. It is important that the transfer of assets is fully documented and valued so that it neither contravenes Ukrainian regulations nor subsequently attracts attention in Germany due to its unclear origin. The chain comprising the resolution, contract, valuation and payment method should be complete.

What are the employment law implications for the workforce?

In companies that relocate their production, the workforce is often spread across several countries. Ukrainian labour law provides for measures to deal with this. Where there is no work available, it provides for what is known as ‘shutdown’, i.e. the temporary suspension of work, as well as the option of remote working, which is frequently used during the war. An employment relationship under Ukrainian law can therefore continue whilst the employee works from abroad or takes a break.

It is important to bear in mind compulsory military service: some male employees have registration and, where applicable, military service obligations, of which the employer should be aware. When employees work for a German company, the question arises as to which legal system governs their employment – the Ukrainian or the German one – and whether a structure involving two employment contracts or a posting arrangement is appropriate. The article on skilled workers from Ukraine explains how the qualifications and certificates of Ukrainian employees can be classified. We handle the Ukrainian aspects of this matter, whilst our German colleagues are responsible for the German labour law arrangements.

How can Ukrainian society and German business operations be linked?

A German business operation can take various forms: from a branch of a Ukrainian company to the establishment of an independent German company, such as a GmbH or UG. Which legal form is most suitable depends on criteria such as liability, taxation, banking eligibility and market presence. The authorised solicitors at Maxfeld.legal handle the incorporation and registration on the German side.

From a Ukrainian perspective, a clear and well-defined structure is crucial. Services and supplies between the Ukrainian company and the German business should be set out in contracts, priced in line with market rates and settled via permissible payment methods. This ensures that the structure remains robust both in the eyes of the Ukrainian foreign exchange and tax authorities and from the German perspective. By considering both aspects together from the outset, one can avoid a structure established abroad becoming a problem in Ukraine.

What should Ukrainian companies clarify first?

To begin with, it should be established which movements of funds and assets are permitted under the current NBU regulations and how the set-up in Germany can be financed. This is followed by a decision on the structure – whether to set up a branch or a separate German company – as well as the contractual relationship between the two levels. Finally, tax residency and permanent establishment risks in both countries must be assessed, as these determine the financial burden on the entire structure. These issues can be prepared from a Ukrainian perspective and coordinated with the German side. The firm’s German legal team handles the incorporation in Germany, the tax classification in Germany and the ongoing support for the German operations. We address the Ukrainian aspects relating to continuity, foreign exchange and relocation in advance.